TaxTMI 
TaxTMI 
2026 (6) TMI 976
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....7 days in filing the above appeals. Revenue filed notarized affidavit explaining that due to transfer of Officers, other work-load and case records were not found in the office, the delay in filing the above appeals. Considering the above submission the delay of 11 days and 7 days in filing the above appeals are hereby condoned. 3. ITA No.73/Ahd/2024 relating to the Asst. Year 2011-12 is taken as the lead case. Brief facts of the case is that the assessee is a partnership firm and engaged in the business of developing Housing projects. For the Asst. Year 2011-12 regular assessment u/s 143(3) of the Act, 1961 was completed in case of the assessee allowing the claim of deduction u/s. 80IB(10) of the Act. Thereafter, the case of the assessee was selected for reassessment proceedings on the basis of search conducted on the JP-ISCON group, wherein the assessee firm sold 13 flats by the employees of JP Iscon Pvt. Ltd. and the cost was given by the Partner's of the assessee firm by interest free loans. Three years later the employees of JP Iscon Pvt Ltd repaid by the loans which is against the provision of section 80IB(10)(f) of the Act. The assessee explained that there was no violati....
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....al or spouse or the minor child of such children, HUF in which such individual is karta or any other person representing such individual, spouse or minor child or HUF in which such individual is karta. 4. In the instant case the appellant has sold the flats to the individual who were employees of JP Iscon Pvt. Ltd. and thus they do not get covered by the provision of section 801B(10) (f) (iii) of the Act and thus there is no violation of the said section. Further the purchaser of flat has disclosed the capital gain on sale of flat in its ITR and also paid relevant tax on the same. Further during the assessment proceedings in case of 5 employees including Shri. Ankit Shah has accepted that the transaction of purchase and sale of flat was related to him and their assessing officer has also accepted the contention given by them and passed the order accordingly. The appellant relies on the judgement given in matter of Pharande Developers Puna V. CIT, ITA NO.715/PN/2009 (AY 2005-06) and ITA NO.175/PN/2011 (AY 2006-07), Patel Jashwantlal A v. ITO (2015) 38 ITR 135 (Ahd.) (Trib.), CIT v. Brahama Associates (2011) 9 taxmann.com 289 (Mum.) (HC), CIT v. Arun Excello Foundations Pvt ....
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....the present appeal has been filed by the ITO, Ward 1(1)(3), Ahmedabad, against the order of the CIT(A) National Faceless Appeal Centre (NFAC) Delhi dated 06.11.2023 for the Assessment Year 2011-12. 2. That though the order passed by the CIT(A) is in favour of the Respondent, there are certain grounds which were decided against the Respondent by the CIT(A), but the Respondent has not preferred any cross-appeal or cross-objection. 3. That the Respondent craves leave to support the order of the CIT(A) on the following grounds which were decided against him: LACK OF JURISIDICTION 1. The entire proceedings are invalid and ex facie bad in law as the same are not supported by ingredients of the statutory provisions under which initiation of proceedings is done. Hence, all subsequent proceedings in furtherance to illegal initiation of proceedings are mere continuation of illegality in perpetuity. 2. The Respondent humbly submits that in the present cases all the employees and other persons as mentioned by the Ld. AO have purchased the flats in F.Y.2012-13 relevant to A.Y.2013-14 and deduction for the said flats has been claimed by the Respondent....
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....2, whereas, the assessee has specifically contended that the flats alleged to have been allotted in violation of section 80IB(10)(f) were admittedly purchased during Financial Year 2012-13 and such transactions pertain to Assessment Year 2013-14. The deduction relatable to those units was also claimed in Asst. Year 2013-14. Significantly, the Revenue has not brought any material before us to demonstrate that the alleged allotments forming the basis of the disallowance actually pertain to the previous year relevant to Asst Year 2011-12. 8.2. Therefore the applicability of section 80IB(10)(f) has necessarily to be examined with reference to the year in which the relevant residential units are allotted and the corresponding deduction is claimed. If the alleged violation itself pertains to a subsequent assessment year, denial of deduction in an earlier year would be contrary to the scheme of the IT Act. An assessment has to be framed with reference to the income and statutory conditions applicable to the relevant previous year. Events occurring in a subsequent previous year cannot ordinarily constitute the basis for denying a deduction already allowable in an earlier assessment year....
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....ent of Shri Ankit Shah recorded under section 132(4) of the Act. Except placing reliance on such statement, the Ld AO has not brought any independent evidence to establish that: * the flats were allotted to Shri Jayesh Kotak; * the registered purchasers were merely name lenders; * the consideration actually emanated from Shri Jayesh Kotak; * the assessee had knowledge of any alleged representative arrangement; or * the allotments were made in violation of section 80IB(10)(f). 9.3. Further No documentary evidence such as agreements, correspondence, financial trail or contemporaneous material has been brought on record by the Revenue to establish that the registered purchasers were merely acting on behalf of another person. An addition resulting in denial of deduction of nearly Rs. 19.91 crores cannot rest merely upon suspicion or inference unsupported by corroborative evidences. 9.4. On the contrary, the assessee has produced substantial documentary evidence demonstrating that: * the flats were allotted to different individuals; * sale deeds were executed in their respective names; * payments were made thr....
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....ment was in substance made to the same individual through another person acting merely as his representative or proxy. No such evidence has been brought on record by the Revenue in the present case. Whereas the subsequent conduct of the purchasers assumes significance. The purchasers have: * held the flats/properties in their own names; * dealt with the properties as owners; * transferred the properties; * disclosed capital gains in their own Returns of Income; and * the Department has accepted such assessments. Having accepted the purchasers as owners for purposes of taxation of capital gains, the Department cannot, in the assessee's case alone, contend that they were not the real owners without bringing convincing material to justify such inconsistent stand of the Revenue. 10.1. It is settled law that section 80IB is a beneficial provision enacted to encourage development of housing projects. Where two interpretations are reasonably possible, the interpretation advancing the object of the incentive provision deserves acceptance. At the same time, denial of such substantial deduction requires strict proof of violation of statu....